Tag Archives: David Cameron

More interested in reaching a “new settlement” with the European Union than ancient Greece, British Prime Minister David Cameron on Thursday defended his belief that the Parthenon Marbles should not be returned to Athens, saying he does not subscribe to the idea of “returnism”. At PASOK headquarters, though, they have no reservations about returnism.

The return of four Socialist deputies who quit the party following a tense parliamentary vote in November to approve a new package of austerity measures and reforms that secured Greece’s latest loan tranche was confirmed on Thursday. The four – Costas Skandalidis, Angela Gerekou, Michalis Kassis and Yiannis Koutsoukos – failed to support the package and lost their place in PASOK’s parliamentary group.

Welcoming them back on Thursday, PASOK leader Evangelos Venizelos said that their time away from the fold was “part of the cost” the party had to pay for Greece getting its December loan installments and apparently reducing drastically the threat of a eurozone exit.

British Prime Minister David Cameron is a worried man these days. He has every right to be. An opinion poll earlier this month gave the Labour Party a 14-point lead over the Conservatives, the largest for Cameron’s rivals since 2002. The strains in his coalition with the Liberal Democrats are showing as the public questions his government’s austerity policies, welfare cuts and vapid initiatives, such as the Big Society. The UK economy is in its second recession in four years, the country’s longest slump since the 1930s. And, one of the UK’s largest banks, Barclays, has just been fined for trying to manipulate the Libor rate for inter-bank lending.

On Tuesday, Cameron set aside these worries and discussed with a House of Commons committee a completely different set of concerns, the most significant of which was what Britain would do if Greece were to exit the eurozone. “I would be prepared to do whatever it takes to keep our country safe, to keep our banking system strong, to keep our economy robust. At the end of the day, as prime minister, that is your first and foremost duty,” he told MPs from all parties.

On the day London was awarded the 2012 Olympic Games, we played The Clash’s “London Calling” on a radio show I co-hosted in Athens. The song — about a world slipping toward some kind of destruction — was played by a lone guitarist at a recent event to mark the one-year countdown to the English capital hosting the world’s biggest sporting event. A few days later, its lyrics — such as “London calling to the underworld/Come out of the cupboard, you boys and girls” — proved an appropriate soundtrack to possibly the worst civil unrest, rioting and looting the city has ever seen.

It seemed a delicious irony that an e-mail informing me about ticketing arrangements for the 2012 Olympics should arrive in my in-box on Tuesday afternoon, as London and other cities braced for a fourth night of rioting. But there is nothing amusing in seeing the city you were born in being ripped apart a few weeks after the city you live in suffered the same fate. I can feel nothing but sadness at seeing areas I know well, places where friends live and a neighborhood where my father ran a business for more than two decades being decimated by youths who appear to have no comprehension of the damage they are wreaking on communities.

Greece’s debt crisis has given people license to blame its inhabitants for all kinds of things, so it was heartening last week to hear a leading European politician say, “You can’t blame the Greeks.” The comment by Ed Miliband, the British Labour Party’s leader, was for domestic consumption, as part of an attack on his country’s Conservative government, rather than as an expression of support for his fellow socialists at PASOK. But it was a timely reminder that the Greek crisis is not taking place in a vacuum and that the country’s experiences and dilemmas are being replicated in other parts of the world.

“Your austerity rhetoric has led to the lowest levels of consumer confidence in history in this country,” Miliband told British Prime Minister David Cameron in Parliament after he revealed that the economy had grown by just 0.5 percent of gross domestic product during the first quarter of the year. “You’ve been prime minister for a year,” the Labour leader added. “You can’t blame the Greeks, you can’t blame the Bank of England, you can’t blame the last government, you can’t even blame the snow.”

Trying to make out what’s going on with the Greek economy at the moment is much like attempting to get a good night’s sleep when there is a clutter of pregnant cats outside your window. Somewhere between Greece’s emergency lenders, its government and its opposition parties, reality has been lost and it has become difficult to judge the privatization plans – which have prompted all the scratching, biting and catcalls – on their merits, if they have any.

When he was in Athens a few months ago, the International Monetary Fund’s managing director, Dominique Strauss-Kahn, likened himself to a doctor, called in to save the sick man of Europe: debt-ridden Greece. But recent developments suggest that what Greece really needs is not a doctor but a psychologist. More than anything else, the country is suffering from a serious case of schizophrenia. Certainly, the PASOK government and its main opposition, New Democracy, have displayed a worrying mental instability and lack of clear thinking in their reaction to the tactless statement by representatives of the IMF, the European Commission and the European Central Bank (the troika) on February 11 about Greece needing to raise 50 billion euros over the next five years from the sale of state assets.

The government’s delayed response to the troika’s statement made it seem as if Prime Minister George Papandreou and his team had stirred from a deep slumber. It was a slow, clumsy comeback that clouded the real issue. PASOK had every reason to feel aggrieved about the troika now not only shaping but also announcing Greek economic policy, and not even paying lip service to the country’s sovereignty, as compromised as it may be. But this was a point that had to be made – as forcefully as possible – behind closed doors. Trying to play tough in public with the organizations that are lending you 110 billion euros and preventing you from going bankrupt really doesn’t cut a swath. Nobody in Greece, or anywhere else, will for a minute think that angry words via the media will shift the balance of power between the government and its creditors. It’s clear to everyone who wears the pants in this particular relationship.

The outburst that emanated first from the keyboard of government spokesman Giorgos Petalotis and then the mouths of various PASOK members had an immediate negative impact because the troika said its February 11 news conference would also be its last, meaning that its representatives would no longer have to answer questions or justify their decisions in public – hardly a victory for transparency or democracy. Beyond that, the jingoistic tone of the government’s retort, which suggested that only the Greek people had the right to order ministers around, did nothing for informing the debate over privatization.

Greece has debt of more than 300 billion euros to pay off. As of 2013 its emergency loan installments will end and it cannot expect to receive cash injections from the EU and the IMF forever. It has to find a way of tackling, on its own, the debt it built up through years of irresponsible governance. One of the options available is to seek to profit from state assets. To couch this debate in nationalist terms is irresponsible and counter-productive. Papandreou’s assertion, for instance, that the government would pass a law forbidding anyone in power from selling state land without the approval of Parliament is virtually meaningless. Apart from a token symbolic value, it has no real substance because any government at any given time, unless it’s a coalition, will have a majority in Parliament and will therefore be able to approve any sale it needs or wants.

Also, it seems a bit rich for Papandreou to make bold claims about selling public land in the same week that a think-tank named after his father, the Andreas Papandreou Institute of Strategic and Development Studies (ISTAME), said that a study it carried out found that 45 percent of the state’s land had been snatched by land-grabbers and that Greece would be lucky if it could find 100 pieces of prime real estate to sell. In Greece, it seems, it is fine for public land to be taken over by opportunists, profiteers, monasteries, or whoever else it may be, but it is anathema for it to be sold to pay off the debt that burdens every Greek taxpayer.

Determined to prove that it can beat PASOK at its game, New Democracy displayed an even more pronounced split personality by both castigating the government for being supplicant to the troika but at the same time saying that it should have started selling off state assets much sooner. This neurosis was epitomized by ND leader Antonis Samaras in his speech to the party’s political committee on Saturday when, in almost the same breath, he accused PASOK of handing the keys to Greece over to the troika and proudly reminded people that he had suggested that 50 billion euros could be earned from privatizations as far back as last summer.

ND’s consternation has combined very well with the government’s muddled thinking to leave Greeks with little idea about where the country stands, what assets it has and how they could be used to help Greece stand on its own two feet. There has been little talk of which, if any, state enterprises could be sold off, of which publicly owned companies investors might be willing to take over the management or if the ambitious 50-billion-euro target is even remotely achievable. Most importantly of all, there has been absolute silence on the question of what the drawbacks to privatization might be, whether the medicine being administered to Greece by Dr Strauss-Kahn and his associates is actually any good for the country.

Privatization may be a way of Greece taking ownership of its own debt problems and an injection of capital would allow it to buy back its own bonds at a discount, thereby helping pay off a sizable chunk of what it owes. However, this should not disguise the fact that privatization comes with many deep pitfalls. Britain, which was the first European Union country to embark on widespread sell-offs in the 1980s, is another country that has been toying with the idea of privatization over the past few days. Prime Minister David Cameron is set to present within the next two weeks proposals to allow private firms to bid for contracts to run virtually all public services.

This is light years beyond what Greece is currently considering but it’s a reminder that Britain is testament to why privatization is often not in the public’s greater interest. The first wave of sell-offs in the early 1980s included Jaguar cars, Rolls Royce, British Gas and British Steel, signaling the beginning of the end for the country’s industrial base and its potential to create jobs. This was followed up in the 1990s with the disastrous privatization of the railways, which led to a more expensive and inferior service. The Labour government of the late 1990s allowed the private sector to extend its reach through a series of Public Private Partnerships (PPP), which meant that by the beginning of the last decade key services such as healthcare and education were largely reliant on private investment, which often came with some very dangerous strings attached, such as private contractors being able to sell their contracts to build public infrastructure or run services to subcontractors. This whole process led to some firms that were particularly successful in winning these contracts transforming themselves from financial small-fry to profit-making behemoths in just a few years. From a Greek point of view, though, the most significant lesson to be drawn from the British example is the implication that the PPP schemes had for British debt. The partnerships were essentially a form of borrowing – private firms were given contracts to build or operate for a fixed-term in return for reaping the revenues from the project. In 2003, the Treasury estimated that the government had accumulated 110 billion pounds worth of debt from its PPP initiatives.

As Greece considers how to exploit its assets, its schizophrenia will only cloud its judgement. Privatization is neither a panacea for the country’s ills, nor – if approached with maturity – is it a threat to national sovereignty. It’s a policy that should not be adopted just for the sake of it, nor avoided just to make a populist gesture. It’s a strategy that should only be followed if it’s in the public interest to do so. Sadly, nothing that has happened over the last few days suggests that anyone – be it the troika, the government or New Democracy – really has the public interest at heart.

Ahead of the May general elections in the UK, Liberal Democrat leader — and soon-to-be British deputy prime minister – Nick Clegg said the UK faced Greek-style “economic, political and social disruption” if the new government could not “find a way to persuade people” to accept drastic public spending cuts. He made a lot of people laugh then. Last week, a large group of students took over the complex housing the headquarters of the Conservative Party, the senior partner in the coalition government, to protest the sharp rise in university tuition fees triggered by the cuts Clegg had spoken about. Nobody’s laughing now.

Greece is acutely familiar with student protests and arguments about the cost of tertiary education but there are several elements to the British youngsters’ action that should make Greeks sit up and think.

About 50,000 students took to London’s streets last Wednesday to protest the Conservative-Liberal government’s decision to raise the ceiling on annual university fees from about 3,000 pounds (3,500 euros) a year to 9,000 pounds (10,600 euros). Students were enraged first of all by the enormity of the rise – to put things into perspective, graduates in the late 1990s didn’t have to pay a penny for tuition. Just over a decade later, they face the prospect of leaving university with debts of almost 30,000 pounds (35,000) euros. The British government’s scheme to allow graduates to pay this through an extra tax that will be levied once they find permanent employment is little comfort to today’s teenagers and 20-somethings: Given the current economic conditions, the prospects of finding such a job are diminishing rapidly. The coalition government’s public spending cuts will lead to almost 500,000 civil servants losing their jobs over the next few years and the situation in the private sector is not encouraging either.

In Greece, the prospect of discussing any kind of financial contribution by university and technical college (TEI) students toward their fees was impossible at the best of times, let alone now that the education budget is being slashed. Here, however, the argument is dominated by sanctimonious academics and bloody-minded student groups who refuse to accept that scant funding is just one of many problems afflicting Greek institutions, none of which made the list of the world’s top 200 universities published by The Times last week. The British students’ fight seems more inspiring compared to the entrenchment of those who hold tertiary education hostage in Greece, as it’s about competing for a better future rather than refusing to let go of a mediocre past.

The British complain, for instance, that they’re being asked to pay three times as much for their education at a time when the state, which last year provided 8 billion pounds (9.4 billion euros) of funding for universities, is slashing its investment in the sector. In other words, they’ll have to pay more for an inferior product. So, it’s difficult for young people to accept they have to do their bit for fiscal discipline. “There is an appetite for financial rigor, so long as it reinforces recognizable moral principles,” claims Charles Moore of the pro-Conservative Daily Telegraph newspaper, but there doesn’t seem to be anything very moral or principled about putting tertiary education – one of the main arteries pumping new blood to the heart of the economy – beyond the reach of the less wealthy.

It can only be galling for students struggling to put themselves through university to hear Prime Minister David Cameron and his Chancellor, George Osborne, claim: “We’re all in this together” when they talk about their drastic cuts. The students ask: How can Cameron, Osborne or any of the 22 of 29 cabinet ministers who are millionaires feel any solidarity with those who have to deal with the impact of their austerity measures? Echoing the feeling of complete detachment between politicians and the public that has become familiar in Greece, British daily The Independent wrote in its editorial of the student protest: “The fury on display seemed to contain other strands, such as a sense of ‘them and us,’ and the conviction that direct action was the only way to convey the desired message to those in power.”

Despite the siege of Conservative Pary headquarters, the main target of the students’ anger was Clegg, who had warned of a fierce reaction to unfair cuts but seemed incapable of heeding his own advice. Students were enraged by the Lib Dem leader, because he made tuition fees one of the top issues in his election campaign. He promised he would “implacably oppose” any attempt to increase the cost of studying but his supposed principled stand buckled soon after the students helped put him in office. Last week’s protest was the just the beginning of an effort to remind Clegg and his colleagues of elected officials’ obligations. “This was the first step in holding politicians to account and using the democratic powers in our control in order to win our case,” said Aaron Porter, the head of the National Union of Students (NUS).

The NUS has indicated it will adopt a so-called “decapitation” strategy, which will see students target the constituencies of Clegg and other Liberal Democrats in the run-up to the next elections with the aim of unseating them. It’s in their embracing of the potency of democracy and their determination to invert the pyramid, so the real power lies with those who cast the ballots, not those who amass them, that the British students demand Greeks’ attention. Greek voters got a taste last Sunday of what it feels like to no longer accept politicking, when independent candidates Giorgos Kaminis and Yiannis Boutaris were elected mayors of Athens and Thessaloniki, respectively. Although they were endorsed by PASOK, the ruling party’s support was so feeble it actually helped both men appear true lone riders promising a different set of values rather than members of the traditional political herd who are bound by commitments to the party.

The British students, aided by the verve of youth, have reacted to betrayal in an instant. For Greek voters, disorientated and disenfranchised by blind party allegiances and years of broken promises, the process has been much slower. Yet the victories of Kaminis and Boutaris are signs that a new way of thinking can emerge: one that dispenses with the constraints of the past and the fear of the unknown and which imbues voters with the belief that they have the power to punish the layabouts, the liars and the crooks. So, the British students and the Greek people face the same challenge: to find a way of soaking up this moment of enlightment and harnessing the power of democracy. If they manage it, they could have the last laugh.

It’s a scene that is becoming very familiar to people across Europe: A newly elected leader addresses his nation and blames the previous government for its “total irresponsibility” which has left a “terrible legacy” of seriously compromised public finances, which are in an “even worse state than we thought” and which will require “painful” but absolutely necessary cuts. Earlier this year, it was George Papandreou delivering this stark message — British Prime Minister David Cameron reprised the role this week.

A few days earlier, the scene had been repeated in Hungary, which, like Greece, has borrowed money from the European Union and the International Monetary Fund. The claims by government officials in Budapest that the previous administration had disguised the poor state of the local economy and that the public deficit would be bigger than expected, sent the type of shockwaves across the continent and international financial markets that only Athens had been capable of until recently, as concerns about a Hungarian default stoked another round of fear about the future of the euro and the EU.

Apart from Greece, Britain and Hungary, Ireland, Spain, Portugal, France and Italy have all had to take steps – albeit less austere than the Greek ones – to rescue their public finances. Even Germany, Europe’s economic powerhouse and the metronome for stability within the Union, announced this week that it’s seeking to make more than 80 billion euros in cuts over the next few years. Until now, there has been unease about European countries being too disparate in economic terms but, ironically, the current debt crisis has suddenly given them common points of reference. It’s causing people across the continent to ask two key questions: “Why are we in this position?” and “How do we get out of it?”

There are two aspects to why so many European countries find themselves in a mess: the economic and the political. In terms of the economic failings, the EU simply found itself unprepared for the consequences of the financial crisis that began in the United States two years ago. A failure to reduce debt when European economies were booming meant that the onset of recession — which also coincided with the use of public money to prop up the private sector, especially banks — has saddled many countries with unprecedented debt and exposed an Achilles’ heel that speculators can exploit.

“The banking crisis has mutated into a sovereign debt crisis; the weakest members of the eurozone are targeted because the euro is a comparatively new currency lacking sufficiently strong institutional foundations, and because markets doubt the ability of the weaker countries to manage their debt problems,” the editorial director or the European Council on Foreign Relations, Thomas Klau, told Athens Plus.

This implies that the real roots of the crisis lie in the political arena. Just as governments across Europe have tried to mask the real size of the problem, often leaving it for the next administration to deal with, so for a number of years, the politicians of various ideological persuasions that held power found it easier to go with the flow rather than develop a long-term plan. Instead of making hay while the sun shone, they simply sat back and soaked up the rays. What happened in Greece, more than anywhere else, has driven this point home. “Greece stands as a warning of what happens to countries that lose their credibility or whose governments pretend that difficult decisions can somehow be avoided,” Cameron said this week.

There are few who would argue with him. “I think that the political inadequacies are most pronounced in the Greek case and to a lesser extent in Portugal,” Professor Iain Begg of the European Institute at the London School of Economics told Athens Plus. “In the other cases, it is more that – as with banks like Northern Rock or Lehman Brothers – the business model is no longer as viable as it used to be and that has fueled market scepticism. Let’s not forget that Spain actually scored pretty well in relation to the fiscal rules, even if, with hindsight, we can now say that it ought to have been running a budget surplus.”

These inadequacies, which an unnamed German official described to the International Herald Tribune’s John Vinocur as “a decade wasted through a lack of frankness and realism,” have left many European countries, the single currency and millions of people at the mercy of markets, which have now become the sole judges of economic policy. The response to this situation, therefore, must be one that is deeply political and carries serious conviction. “Because EU members were caught misrepresenting their finances with the passive acceptance of France and Germany for a decade, no response or solution that is based on a statement of intention rather than a legally binding undertaking is likely to lead the markets away from their hair-trigger surveillance of the euro and Europe’s solidity,” wrote Vinocur in the IHT this week.

The political solution to this problem must first come at an individual state level. “In the UK, the problem, I suspect will prove to be reasonably easy to manage but in Greece, the whole approach to the public sector needs radical change,” says Begg. “In Spain and Italy, labor market and welfare reforms will require political courage and leadership.”

This decisiveness then has to be replicated on a collective level as well. The IMF said as much in its report on the European debt crisis this week. “Crisis management is not an alternative to corrective policy actions and fundamental reforms needed to reinforce the foundation of the European Monetary Union,” the Washington-based fund said in the wake of European finance ministers agreeing to commit 440 billion euros to a rescue fund for debt-ridden EU members, which the IMF will also participate in.

In practical terms, it means that common policies and instruments must be devised along with checks that it is in everyone’s interest to adhere to. “What this crisis has shown is that the euro countries must accept a much stronger degree of shared sovereignty over their public finances and economic policy to ensure the long-term survival of their currency,” says Klau. “A monetary union needs a political union, as the Bundesbank wrote 20 years ago.”

Instilling this level of togetherness is going to be a massive challenge. If controling their debt in the midst of a recession appears an elusive goal for EU countries, then getting them to work in harmony toward this will seem like trying to pin down a greased greyhound during a torrential rainstorm. Already this week, Britain has rejected the notion of presenting its national budget to Brussels before submitting it to its own Parliament. The newness of the debt crisis means that political leadership and consensus will take some time to emerge but recent history indicates our futures depend on it eventually shining through.

“The decisions we make will affect every single person in our country, and the effects of these decisions will stay with us for years and decades to come,” Cameron told his audience this week as his government began reviewing its planned spending cuts. “How we deal with these things will affect our economy, our society, indeed our whole way of life,” he added. The Conservative Party leader will probably never utter more accurate words during his premiership. In fact, our way of life is already being transformed. What it changes into will depend on the political decisions taken over the next few months.

This commentary was written by Nick Malkoutzis and appeared in Athens Plus on June 11.